Stock ETF

Loading the player...

DEFINITION of 'Stock ETF'

A security that tracks a particular set of equities, similar to an index. A stock ETF is traded just as a normal share of stock is traded on an exchange, but unlike a mutual fund it will have its price adjusted throughout the day rather than at market close. This type of ETF is usually made up of stocks in a similar industry, such as energy, but can cover an index of equities as well.

BREAKING DOWN 'Stock ETF'

A stock ETF allows an investor to gain exposure to a basket of equities without having to purchase individual shares. A stock ETF can be treated like a normal stock in that it can be shorted or purchased on margin. Like most ETFs, a stock ETF often carries a management fee or other type of expense, but this is typically lower than those found in a mutual fund.

RELATED TERMS
  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. No-Fee ETF

    An exchange-traded fund (ETF) that a broker does not charge a ...
  3. Currency ETF

    Exchange-traded funds (ETFs) invested in a single currency or ...
  4. Index ETF

    Exchange-traded funds that follow a specific benchmark index ...
  5. Bond ETF

    A type of exchange-traded fund (ETF) that exclusively invests ...
  6. Alternative Energy ETF

    An exchange-traded fund that invests in companies engaged in ...
Related Articles
  1. Mutual Funds & ETFs

    ETFs Vs. Index Funds: Quantifying The Differences

    If you are trying to choose between these two index-tracking investments, compare the costs.
  2. Mutual Funds & ETFs

    4 Ways To Use ETFs In Your Portfolio

    To take full advantage of these vehicles, you need to know how they can fulfill certain strategies.
  3. Mutual Funds & ETFs

    Building An All-ETF Portfolio

    Balance is the key when selecting an all-ETF portfolio that will hedge against market volatility.
  4. Mutual Funds & ETFs

    A Brief History Of Exchange-Traded Funds

    Learn how ETFs have become the most popular investment vehicle in less than 20 years.
  5. Mutual Funds & ETFs

    How To Pick The Best ETF

    Of the hundreds of exchange-traded funds on the market, some are bound to fail. Learn how to pick the best of the bunch.
  6. Options & Futures

    The Benefits Of ETF Investing

    Exchange-traded funds provide unique opportunities for investors. Find out how.
  7. Mutual Funds & ETFs

    Active Vs. Passive ETF Investing

    You can use these securities for more than just indexing. Explore the spectrum of possible ETF strategies.
  8. Mutual Funds & ETFs

    10 Ways ETFs Can Grow Your Portfolio

    Implement the core/satellite approach used by money managers for better returns and lower risk.
  9. Investing

    4 Reasons To Invest In ETFs

    As a cost-effective way to achieve a broadly diversified portfolio, including hard-to-own (but worthwhile) assets, ETFs are hard to beat.
  10. Mutual Funds & ETFs

    Introduction To Exchange-Traded Funds

    Get into ETFs and enjoy the benefits of a mutual fund with the flexibility of a stock.
RELATED FAQS
  1. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
  2. Do ETFs pay capital gains?

    Exchange-traded funds (ETFs) can generate capital gains that are transferred to shareholders, typically once a year, triggering ... Read Full Answer >>
  3. How do real estate hedge funds work?

    A hedge fund is a type of investment vehicle and business structure that aggregates capital from multiple investors and invests ... Read Full Answer >>
  4. Are Vanguard ETFs commission-free?

    While some Vanguard exchange-traded funds (ETFs) are available commission-free from third-party brokers, a large portion ... Read Full Answer >>
  5. Do Vanguard ETFs require a minimum investment?

    Vanguard completely waives any U.S. dollar minimum amounts to buy its exchange-traded funds (ETFs), and the minimum ETF investment ... Read Full Answer >>
  6. Can mutual fund expense ratios be negative?

    Mutual fund expense ratios cannot be negative. An expense ratio is the sum total of all fees charged by an asset management ... Read Full Answer >>
Hot Definitions
  1. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  2. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  3. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  4. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  5. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
Trading Center